Electronic money transactions are getting more prevalent and traditional payment methods such as cash, and money orders are slowly devolving into obscurity. This gradual change brings to light an important issue. The anonymity associated with cash transactions are lost when using electronic payment methods. Any payment amount, however minuscule it may be, is tracked and recorded when electronic payment methods are used. In a way this change is good as it provides transparency in regards to monetary transactions. On the other hand it challenges the privacy of an individual. Furthermore, cash transactions are instantaneous. While electronic transactions are not instantaneous even with recent improvements.
Today Crypto currencies (a.k.a Digital Currency/Math Based Currency) are prevalent and growing. The most successful crypto-currency is Bitcoin which is accepted by many vendors as alternate payment method to traditional currencies. It is a decentralized, anonymous electronic currency that first came into existence in 2009. You can use this crypto coin to buy produce at a farmers market, security services from major internet companies, as well as drugs and weapons from your favorite online black market. The list of Bitcoin vendors is growing every day. Very recently several merchants have announced their support for the crypto-currency.
Most of the crypto currencies, including Bitcoin, are not regulated; no single group holds power and there is no centralized trust. In fact, the main objective of Bitcoin is to get away from centralized trust. The value of Bitcoin is changing frequently and it does not adhere to rules of a physical currency. It is traded like a stock within a jurisdiction. If an individual doesn't transact very quickly, the transaction itself will have a different value than originally established. If Bitcoin is viewed as a money order or a check, then the money order itself should not have its own value other than its cash value. In addition, since Bitcoin is based on the distributed trust, it depends on the individuals and their computational ability to validate the transaction and avoid double spending. Bitcoin requires a 10 minute window to verify the trust, and validate the transaction. This extended validation window is not instantaneous and is in fact quite dangerous. The unpredictable and uncontrollable aspects of crypto currencies may introduce another economic collapse similar to the great recession. An economic collapse triggered by the instability of crypto-currencies will be much more consequential that the economic recession in 2008.